Six out of ten new businesses fail. Unemployment isn't getting any better. The housing market is bracing for another bump in the road next quarter. And, as if the cake needed icing, the FDIC reports that about half of America's banks -- including the four largest -- are on the bubble, and may fail by the end of the year.
As serious people, at equally serious companies, search for ways to prosper -- or just survive -- in this bleak economic environment, I urge organization leadership to focus on a principle that is often overlooked in hard times: innovation.
The equation is simple: innovate or perish. At every major crossroads in the history of American business, innovation has been the driving force behind the companies that made it through the bad times. After all, as we all look for the hot new product or the 'killer app' in our respective industries and professions, we tend to overlook the fact that someone has to create or invent it first.
Whether it is a multinational corporation or an entrepreneurial startup, innovation can help a business launch, recover or overcome even the greatest of competitive pressures. If you are a manufacturer, distributor, service provider, supplier, retailer or even a not-for-profit, the pressures of today's new economy are worse than anything the business world has seen for decades. So, how do you get through it?
Look at the companies that are prospering, despite the economy. Apple, Ford, Microsoft and others didn't stand pat as the economy crashed. They reinvented themselves and their product and service lines. After falling behind to Japanese competition amid the GM bailouts, Ford went back to the drawing board on their line of cars and emerged stronger than before, having one of their best quarters ever. It wasn't layoffs or the mitigation of risk that accomplished that. It was innovation, creating something new to satisfy its customer base.
Companies need to expand their notion of what, exactly, is meant by "innovation." When people think of innovation, many of them think of simple brainstorming for ideas. This is a fallacy. Brainstorming is just one small element of a much larger process. Innovation is NOT a tactic.
Rather, it's an ongoing process and "if businesspeople follow the right steps, they can achieve innovation regularly -- not just when someone slips on the soap in the shower and the next killer app just comes to them as they put ice on the bruise on their head.
But, how does one develop that process. That's the key. It's all about building sustainable innovation -- not just to come up with the big idea to pull you through the next quarter, or year, but on into the future.
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